‘I love you guys!’: Elon Musk lands $44.9bn pay deal after Tesla vote

Musk hails ‘awesome shareholder base’ after vote to restore compensation deal rejected by US judge.

Tesla CEO Elon Musk has won shareholders’ approval of all-stock compensation deal worth some $45bn [Kirsty Wigglesworth/Pool via Reuters]Published On 14 Jun 202414 Jun 2024

Elon Musk has won back his $44.9bn pay package at electric carmaker Tesla after shareholders voted to restore the compensation deal in a ringing endorsement of his leadership.

The vote at Tesla’s annual meeting on Thursday came after a judge in the US state of Delaware threw out the deal after finding that the company’s board was too close to Musk and had not protected shareholders’ interests.

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“I just want to start off by saying, hot damn, I love you guys!” a jubilant Musk said as he appeared on stage after the vote.

“We have the most awesome shareholder base. I mean it’s just incredible.”

Musk’s pay deal was valued at about $56bn at the peak of Tesla’s share price in late 2021 but has since declined in value by about one-quarter in tandem with a drop in the company’s stock price.

The shareholders’ vote does not necessarily mean Musk will receive the pay package but could bolster Tesla’s appeal against the Delaware ruling against the deal.

In her January decision, Delaware judge Kathaleen McCormick described the pay package as “unfathomable”.

“Swept up by the rhetoric of ‘all upside,’ or perhaps starry eyed by Musk’s superstar appeal, the board never asked the $55.8 billion question: Was the plan even necessary for Tesla to retain Musk and achieve its goals?” McCormick wrote in her decision.

Musk, who founded Tesla in 2003, does not receive a salary for leading the carmaker.

Under the terms of his 2018 pay deal, Musk agreed to be paid stock worth about 1 percent of Tesla’s equity each time the company achieved one of its operational and financial goals.

While Tesla’s business has soared under Musk’s leadership, at one point taking the company’s market value to $1.24 trillion, sales have slowed sharply amid growing competition from Chinese EV makers.

Musk has also attracted controversy with his outspoken views on politics and battled perceptions that he is spread too thin due to his involvement in six companies, including rocket company SpaceX and social media platform X.

Tesla shares rose 0.7 percent in after-hours trading on Thursday, after earlier gaining 2.9 percent following Musk’s announcement on social media that investors backed the deal.

Prior to Thursday’s vote, Musk had expressed doubts about his future at Tesla.

In January, Musk said in a post on X that he would prefer to build artificial intelligence and robotics products outside of Tesla if he could not have a 25 percent stake in the company.

Musk is already by far Tesla’s largest shareholder, holding more than 20 percent of its equity.

Tesla shareholders on Thursday also approved proposals to move the company’s incorporation from Delaware to Texas and reappoint Kimbal Musk and James Murdoch – Musk’s brother and media tycoon Rupert Murdoch’s son, respectively – to the company’s board.

Tesla did not announce the vote tallies, but several large institutional investors had opposed the deal, including Norges Bank Investment Management, the world’s largest sovereign wealth fund.

Source: Al Jazeera and news agencies